Speaking to reporters after the Rahim & Co’s Property Market Review 2019/2020 briefing here today, Abdul Rahim Abdul Rahman said when he first started working, he also could not afford to own a property.
“There’s no harm in renting, graduates nowadays earn maybe around RM3,000, they can’t afford to buy a home, they have other bills to pay.”
Graduates, he said, should rent first and start thinking of buying a home only after four to five years of working.
He acknowledged that young people faced parental pressure to buy a home but said it was better for them to do so only when they could afford it.
In this respect, he said rent-to-own schemes would be good and that developers should consider offering such schemes rather than leaving unsold units unoccupied.
On the overhang situation where there were now 50,008 unsold homes including serviced apartments and Soho (small office home office) units worth some RM34 billion, Rahim said the market would correct itself in time.
He said that some developers failed to carry out sufficient research before embarking on a project.
“In the old days, when a developer launched a project, there would be a queue to buy the property because there weren’t enough homes.”
Now, he said, many developers were giving discounts to sell off their unsold units, at times to the point of only breaking even.
“But some people still cannot afford the properties.”
The government, he said, should not bail out the developers for not doing their homework.
In Singapore, he said, developers risked fines if they failed to sell their properties.
“This tells developers that before they start their development, they need to do a proper study on the demand.”
The government’s Home Ownership Campaign (HOC), he said, helped to solve the overhang situation a bit and it was not wrong for Putrajaya to carry out such campaigns.
But he said the HOC and its benefits like stamp duty exemptions should be expanded to homes being sold in the secondary market.
Last year, Putrajaya launched the HOC in a bid to encourage Malaysians to buy houses and reduce the number of unsold properties.
During the campaign, developers offered at least a 10% discount on all unsold properties while Putrajaya gave house buyers a stamp duty exemption for residential units priced between RM300,000 and RM1 million.